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from the because-when-they-mess-up-they-only-have-a-golden-parachute...wait-a-minute dept.
Why are CEOs of U.S. firms paid 320 times as much as their workers?:
Last August, Jamelle Brown, a technician at Research Medical Center in Kansas City, Missouri, contracted Covid-19 while on the job sanitizing and sterilizing rooms in the facility's emergency department. Luckily, his case wasn't severe, and after having quarantined, he was back at work.
Upon his return, Brown was named Employee of the Month in his unit and given a gift voucher for use in the hospital cafeteria. The amount: $6.
"That stung me to the bone," said Brown, who makes $13.77 an hour and has worked for almost four years at the hospital, owned by the corporate giant HCA Healthcare. "It made me sit back and say, 'This place doesn't care for me.'"
Research Medical's owner, HCA Healthcare Inc., is a profitable, publicly traded network of 185 hospitals and 121 freestanding surgery centers in 20 states and England. Even in the year of Covid-19, 2020, the company generated $51.5 billion in revenue and increased its pretax earnings by 3.6 percent. Its shares are up by 14 percent this year, versus 10 percent on the Standard & Poor's 500 index.
That performance helped boost the total compensation HCA's chief executive, Samuel N. Hazen, received last year to $30.4 million, a 13 percent rise from 2019, documents show. Although Hazen's salary was 5.8 percent lower in 2020, the total worth of his compensation package equaled 556 times the compensation received by the median employee at HCA — $54,651.
The figures highlight the growing CEO pay gap, a problem among many public companies according to some investors and workers and even a few CEOs. In 2019, for example, the average pay ratio among 350 large American companies was 320-to-1, according to research by the Economic Policy Institute, a left-leaning think tank in Washington, D.C. In 1989, the average was 61-to-1.
(Score: 5, Insightful) by Azuma Hazuki on Monday April 12 2021, @09:07AM (10 children)
n/t
I am "that girl" your mother warned you about...
(Score: 5, Insightful) by Rosco P. Coltrane on Monday April 12 2021, @10:54AM (3 children)
The problem isn't that the US is a capitalist country, it's that it's a plutocracy.
(Score: 4, Insightful) by Azuma Hazuki on Monday April 12 2021, @11:48AM (2 children)
Like I said, our brand of capitalism is broken...
I am "that girl" your mother warned you about...
(Score: 3, Interesting) by Taxi Dudinous on Monday April 12 2021, @01:16PM
Well what do you expect? Even the most appealing "isms" are broken in short order once people get involved. The philosophy can be warm and fuzzy, while the reality grows darker with each moment. The best "ism" needs to be resistant to human corruption. But they all have holes in them that will be exploited eventually, or from the very beginning. This was foreseen after all
Thomas Jefferson
(Score: 2) by Mykl on Monday April 12 2021, @10:37PM
Agree.
Market Capitalism, in theory, results in all vendors/workers earning about the same - they have the same product/labour offer, same location/access to market, same cost, etc.
What the US has is a market which has been twisted and distorted by monied interests to not even remotely resemble a level playing field. This is a problem in all Western economies, but the US not only turned it up to 11, it kept twisting the volume knob until it snapped and spun around another full circle.
(Score: 2) by DannyB on Monday April 12 2021, @01:52PM (1 child)
I'm not against capitalism. What we have become is capitalism run amok.
If you think a fertilized egg is a child but an immigrant child is not, please don't pretend your concerns are religious
(Score: 0) by Anonymous Coward on Monday April 12 2021, @02:34PM
Capitalism is sorta ok. Predatory Capitalism, what we have, is not.
(Score: 2) by HiThere on Monday April 12 2021, @02:29PM (3 children)
It's not just capitalism. It's inherent in a structure where some people decide how much they're worth as well as how much those who work for them are worth. Even people who want to be fair will overrate their own contribution...and lots of people don't have being fair as their primary consideration. And part of "being fair" involves comparing how you are compensated with those who are doing similar jobs. Just about nobody compares the janitor with the CEO. And just about everyone says "I'm better than he is, so I deserve more". That's not capitalism, it happens in every hierarchical organization. And it tends to get worse as time passes, until the system breaks down.
Javascript is what you use to allow unknown third parties to run software you have no idea about on your computer.
(Score: 0) by Anonymous Coward on Monday April 12 2021, @08:36PM (2 children)
It is mere coincidence that the gap grows with time. The gap is growing because companies are growing. Split the big companies, and CEO pay goes down. Let then buy each other out, and CEO pay goes up.
I'm not saying I agree that high CEO pay is a problem. That idea smells of envy, jealously coveting what others have. I'll agree that the trend is of concern.
If you do think CEO pay is a problem, the solution should be damn obvious. Start by breaking up Apple, Facebook, Microsoft, Walmart, Amazon, Cargill, Citibank, Dupont, Cengage, Kraft, General Foods, Boeing, and so many others.
Oh, and don't cause the USA to fail in competition against non-USA megacorporations. Have a defense against other countries refusing to participate in breaking up huge businesses. If we can't get Samsung and TMSC broken apart, maybe we can't break apart Intel, and so on for all the rest.
(Score: 0) by Anonymous Coward on Monday April 12 2021, @08:50PM
Yes, this is the problem. Companies should not be allowed to merge if they have more than about 10% of their market. If they have more than about 20% of their market, they should be required to divide into at least two separate companies. Without competition, market economics does not work well enough.
(Score: 2) by legont on Monday April 12 2021, @09:55PM
The breaking is actually very easy to do. They prepared everything themselves.
After 2008 when many were close to bankruptcy, most companies divided themselves into dozens or hundreds of independent entities that have market kind of relationships between each other. One of the first one - many years before - was Fidelity where every mutual fund is a separate business that uses common infrastructure which is also a separate business. If the government simply dissolves Fidelity but leaves all the subsidiaries alone, nothing would happen or even noticed. There will be hundreds of new companies working with each other the same way as before, but without the CEO. They did it because they wanted to limit an exposure when a fund goes down.
Fast forwarding to now... Google? Just dissolve Alphabet and leave all their properties alone. Goldman and Morgan Stanley? Dozens of companies and a few banks. They are all now like this - ready for extermination. They paved their way to their grave.
"Wealth is the relentless enemy of understanding" - John Kenneth Galbraith.